Ethereum transaction fees drop by 80% as PEPE enters sleep

Ethereum gas fees hit their highest level since 2022, championed by the emergence of PEPE, a “Pepe the Frog” themed altcoin following May’s comeback of memecoin. However, the trend seems to have slowed down amid dwindling interest in PEPE despite many investors becoming millionaires overnight.

Total Ethereum transaction fees declined by more than 16% this week, according to new data from on-chain analytics firm IntoTheBlock.

Total Ethereum transaction fees dropped by 16.5% this week! The May meme token craze that fueled the recent fee hike appears to be receding into crypto history. #ethereum pic.twitter.com/QuKgve8wNM

— intotheblock (@intotheblock) June 2, 2023

• Transaction fee when zoomed out dropped 80% in one month from $27.62 by 5 May to $5.50 by 4 June. The figure is currently hovering near the level last seen during mid-April.
• The latest development comes as a huge relief for blockchain, whose critics have always regarded excessive gas fees as a “fatal flaw”.
• In addition to the mainnet, the Ethereum Layer 2 scaling solution was also affected by the increase in transaction fees during the Memecoin renaissance last month.
• Notable spikes were observed especially on chains built using zero-knowledge proofs such as Polygon zkEVM and zkSync Era. In fact, the cost of a transaction on these rollups ranged from $2 to $11, temporarily rising to $30.
• On the other hand, the market capitalization of Pepe witnessed a significant decline from $1.15 billion to $450 million in the last one month.
• Its price declined by more than 60% during the same period despite listing support by major crypto exchanges including Binance.
• Apart from Ethereum, the memecoin frenzy of the bitcoin network, led by Ordinals scrips, has also faded significantly in recent weeks. As a result, transaction fees on the network were back to mid-April levels.